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Is Industria de Diseño Textil, S.A.'s (BME:ITX) CEO Being Overpaid?

Simply Wall St

Pablo Isla de Tejera became the CEO of Industria de Diseño Textil, S.A. (BME:ITX) in 2005. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

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Check out our latest analysis for Industria de Diseño Textil

How Does Pablo Isla de Tejera's Compensation Compare With Similar Sized Companies?

Our data indicates that Industria de Diseño Textil, S.A. is worth €79b, and total annual CEO compensation is €11m. (This is based on the year to January 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €3.3m. We looked at a group of companies with market capitalizations over €7.2b and the median CEO total compensation was €2.8m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

It would therefore appear that Industria de Diseño Textil, S.A. pays Pablo Isla de Tejera more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Industria de Diseño Textil has changed from year to year.

BME:ITX CEO Compensation, May 23rd 2019

Is Industria de Diseño Textil, S.A. Growing?

Industria de Diseño Textil, S.A. has increased its earnings per share (EPS) by an average of 6.4% a year, over the last three years (using a line of best fit). Its revenue is up 3.2% over last year.

I'm not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Shareholders might be interested in this free visualization of analyst forecasts.

Has Industria de Diseño Textil, S.A. Been A Good Investment?

With a three year total loss of 8.3%, Industria de Diseño Textil, S.A. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount Industria de Diseño Textil, S.A. pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Industria de Diseño Textil.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.